I am retired and want to start succession planning for my children. Towards that end, I want to understand the difference between estate planning and succession planning.
—Name withheld on request
Technically, estate planning and succession planning are different. However, depending upon the objective of the person undertaking this exercise, these may overlap.
Estate planning is implemented during the lifetime of the person, with a view to streamline asset holdings and businesses, whereas succession planning is more about who will inherit the assets or businesses.
Typically, if a person owns multiple assets or businesses, then the right approach would be to combine the estate and succession planning to ensure seamlessness during the person’s lifetime and post demise.
Since your objective is to undertake planning for your descendants, you would be looking at succession planning to ensure all your assets are divided among your descendants in the manner that you desire post your demise.
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My parents died of Covid and not prepared any will. My siblings and I are their only legal heirs. We do not want an equal share in all their properties but prefer to distribute it as per our mutual understanding. How can we legally do that?
—Name withheld on request
In accordance with the Indian Succession Act, if a person dies intestate then the property is divided equally among his / her heirs. If you and your siblings are the only legal heirs, you will inherit an equal share in all the properties. However, if you want to distribute the properties among yourselves, then you can consider entering into a family arrangement under which you will record the re-alignment of ownership of the properties.
With the family arrangement, you can consider entering into and registering ‘gift deeds’ or such other documents for each of the properties whereby, the other siblings will gift their share in the relevant property in favour of the person who is entitled to the same as per your mutual understanding. By execution / registration of the aforementioned documents, you and your siblings can then deal with the properties which have come to your respective shares as you may deem fit. However, please note that all the heirs of the deceased persons should execute the arrangement and the documents to avoid any litigation / dispute in future.
Hemang Parekh is partner and Mitali Naik is associate partner, at DSK Legal
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